Further observation suggests that targets may instead be picked based on orbital height or space forces, or on some other parameter.

Whatever the case may be, targeting strategy does not seem to be very sensible. Wings can waste a lot of time chasing very small wings that do not pose much of a threat or pick targets that they are not well-suited to fight (e.g. jumpcruisers targeting protected jumpships when they could be targeting explorers).

Targeting strategy should probably be based on unit type, wing proximity, wing size and strength, and maybe whether the unit is attacking or defending. I suggest:

Everything should prioritize transports that are landing.

Everything should make more use of opportunity fire against non-targeted wings, especially transports, which currently do not fire at all because they do not pick targets.

Explorers should prioritize planetary defenses and small wings, and should give lowest priority to large wings. They should use their superior delta-v to remain engaged with the same wing for as long as possible.

Jumpships should prioritize jumpcruisers and missile-type planetary defenses and avoid entering low orbit if the planet is protected by cannons. They should give lowest priority to attacking gunships, except Hammerheads.

Jumpcruisers should prioritize starcruisers and planetary defenses, and should give lowest priority to attacking jumpships.

Jumptransports should opportunistically fire back at attacking ships and defenses (right now they never fire their weapons, per http://ministry.kronosaur.com/record.hexm?id=2509). They should orbit at a minimum of 30ly to avoid being engaged by defenses during invasions.

Gunships should prioritize jumpships and starfrigates. They should use their superior delta-v to remain engaged with the same wing as long as possible. Gunships should give lowest priority to attacking planetary defenses and should avoid exposing themselves to planetary defenses when attacking. Hammerheads should behave like jumpcruisers if they retain their current missile-type attack.

Non-Manta starfrigates can basically attack anything safely but should give lowest priority to attacking wings of individually weak ships like explorers. They should look for a new target within range every time a targeted wing goes out of range since their long range allows them to almost always be usefully firing at something.

Starcruisers should prioritize gunships, other starcruisers and heavy planetary defenses and give lowest priority to attacking jumpships and starfrigates.

GDMs, hypersonics and armored sats should prioritize gunships and jumpcruisers and give lowest priority to jumpships and starfrigates.

Battlestations are a poor defense but should prioritize starcruisers and gunships, and give lowest priority to jumpships and starfrigates

Autocannons, HELs and plasma should fire at anything in range without discretion.